Challenger bank Starling granted UK banking license

Challenger start-up bank Starling has been granted a UK banking licence from the Prudential Regulatory Authority and the Financial Conduct Authority.

The digitally-native mobile bank, which is planning to launch in January 2017, revealed that it has received a restricted banking license from the two regulators, this means that it will now be able to hold deposits and operate as a bank.

It is expected that once the bank has proven itself the FCA and PRA will lift the restrictions and give it a full license.

Anne Boden, CEO, Starling Bank, said: “We are delighted to have the confidence and support of the regulator, to move forward and introduce a new style of banking.”

“For the past year, our team has been focused on building our product and technology from the ground up. By 2020, the number of UK mobile banking users will double from 17.8 million to 32.6 million and our aim is to empower these people to better manage their finances with an incredible app, purpose-built for those who happily manage their lives on their phone.”

The bank is set to offer a set of data-led insights to help give customers a clearer picture of their entire financial situation all from one account.

Insights into spending habits and real-time notifications will also be a feature of its offering, while more are expected to be created in the coming months.

A number of challenger banks such as Mondo, Tandem, and Atom have been going through regulatory authorisation in order to get a full license to operate. Atom’s mobile app went live in April after restrictions were lifted by the regulator, while Tandem got its Bank of England license late last year.

Challenger banks have been targeting the traditional banking model and aiming to streamline the way that consumers manage their money with a technology driven approach.

In addition to receiving a restricted banking license, Starling has also launched a new website and revealed that it will join Faster Payments later in the year, which is a 24/7 real-time payment service.

The idea behind this is to improve the payments experience for customers and partners. The decision to join Faster Payments will enable the bank to offer real-time payments any time of day, any time of the year.